By Mark Jones
LONDON (Reuters) – Telecommunications company Veon said on Wednesday it would invest $600 million in the infrastructure of its Ukrainian subsidiary Kyivstar, the largest mobile network in the war-ravaged country.
The Amsterdam-listed company said the funds would help upgrade the mobile operator’s infrastructure, including improving 4G connectivity and services across Ukraine.
The country has seen much of its mobile infrastructure hit by Russian rocket attacks. Kyivstar technical teams have carried out nearly 150,000 repairs since the invasion of Russia last year, Veon said, adding that he had ensured that 93% of the network was operational.
“We take this opportunity to make a bold statement about our commitment to investing,” Kyivstar CEO Oleksandr Komarov told Reuters, especially at a time when many other companies are holding back on making future plans.
He said the investment, which will span the next three years, would extend the company’s 4G network coverage to 98% of Ukraine’s population, but also begin to make it “5G-ready” once the war ended.
Kyivstar has lost around 7% of its active customer base – around 1.7 million subscribers – since the war began last February. Indeed, some parts of the country are now controlled by Russia and no longer use its network, but also because others have completely left Ukraine.
Komarov, who was in London for an international summit on Ukraine’s reconstruction, said that while the number of customers was likely to continue to “reduce”, Kyivstar was doing better than others and remained “financially positive”. .
If necessary, it could start tapping into available support from multilateral development banks or borrowing from Ukraine if, as expected, the country’s 25% interest rates start falling in the coming months.
Last November, Veon announced that it would sell its Russian business, Vimpelcom, to a group of senior unit executives, led by its CEO Aleksander Torbakhov, for 130 billion rubles ($2.2 billion).
The process turned out to be complicated and he struggled to get the required permissions from a number of countries to repatriate the money from the sale.
(Additional reporting by Olivier Sorgho; Editing by Clarence Fernandez, Sherry Jacob-Phillips and Sharon Singleton)